Correlation Between HNI Corp and XChange TECINC
Can any of the company-specific risk be diversified away by investing in both HNI Corp and XChange TECINC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HNI Corp and XChange TECINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and XChange TECINC, you can compare the effects of market volatilities on HNI Corp and XChange TECINC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HNI Corp with a short position of XChange TECINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and XChange TECINC.
Diversification Opportunities for HNI Corp and XChange TECINC
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HNI and XChange is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and XChange TECINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XChange TECINC and HNI Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HNI Corp are associated (or correlated) with XChange TECINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XChange TECINC has no effect on the direction of HNI Corp i.e., HNI Corp and XChange TECINC go up and down completely randomly.
Pair Corralation between HNI Corp and XChange TECINC
Considering the 90-day investment horizon HNI Corp is expected to generate 0.12 times more return on investment than XChange TECINC. However, HNI Corp is 8.45 times less risky than XChange TECINC. It trades about 0.09 of its potential returns per unit of risk. XChange TECINC is currently generating about -0.03 per unit of risk. If you would invest 2,959 in HNI Corp on August 27, 2024 and sell it today you would earn a total of 2,790 from holding HNI Corp or generate 94.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. XChange TECINC
Performance |
| Timeline |
| HNI Corp |
| XChange TECINC |
HNI Corp and XChange TECINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and XChange TECINC
The main advantage of trading using opposite HNI Corp and XChange TECINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, XChange TECINC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XChange TECINC will offset losses from the drop in XChange TECINC's long position.The idea behind HNI Corp and XChange TECINC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| XChange TECINC vs. HNI Corp | XChange TECINC vs. Wicket Gaming AB | XChange TECINC vs. Franklin Wireless Corp | XChange TECINC vs. Electronic Arts |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |